Consuming public advised to be wary of deceptive titles

Consuming public advised to be wary of deceptive titles

In its latest report, the Small Investor Protection Association revealed that while there are 121,000 people registered as financial professionals in Canada, only around 4,000 of these individuals have a “fiduciary duty”—that is, an obligation to act in their clients’ best interests.

A clear majority of the registered financial professionals are dealing representatives, who are licensed to sell financial investments. It is this distinction that the public needs to be aware of, according to the report’s lead researcher Larry Elford.

Elford cautioned that an especially pernicious method is to present oneself as a “financial advisor” (spelled with an “o”), which is an unregulated title that is free for use by any professional. In contrast, “adviser” (spelled with an “e”) can be legally used only by those who have fiduciary responsibilities.

“Advisors can sell you the third, fourth, fifth or least beneficial product to you,” Elford said, as quoted by CBC News. “They do that a great deal of the time if it makes them more commissions, or if their bank manager is telling them they need to sell more of the house-brand product.”

This explanation is backed up by the Ontario Securities Commission, which confirmed that “advisor” is not a legal term under existing securities laws, while “adviser” legally describes a person or entity registered to provide advice about securities.

“The game today is to earn clients’ trust,” Elford warned. “And never let them know that you are actually a commissioned salesperson and you don't have to honour that trust.”